How to Become a 401(k) Millionaire

There are nearly 890,000 Americans with at least $1 million in their 401(k) as of September 2025, according to Empower ¹ . A well-funded retirement account like this can afford you the financial security necessary after your career ends. However, there are several steps you’ll need to follow to become a 401(k) millionaire.

A financial advisor can help you handle your 401(k) so that you maximize your investment returns.

1. Start Early

One of the most important factors for your retirement account — or really, any investment — is time. The earlier you begin contributing to your 401(k) savings account, the longer your money has to grow and the greater your returns can compound.

Investing early for retirement significantly increases your chances of reaching 401(k) millionaire status. But what if you’re getting a late start on your retirement savings? Do you still have a chance at meeting your goal?

It all depends on how much you save each year going forward and how you invest your retirement savings. Starting today is still better than starting tomorrow (or a year from now), especially if you are able to save aggressively now.

2. Calculate What You Need

Saving a million dollars for your retirement is an exciting goal to set, but is it the right goal for funding the future lifestyle you have in mind?

Odds are your current spending habits and budget differ from those of your coworkers, best friend or even siblings. Your plans for retirement probably differ, too. Some people plan to enter retirement debt-free, for instance, spending their years gardening and visiting the grandkids. Others want to finally travel the world in retirement or buy their dream home at the beach.

It’s important that you spend some time deciding what you want your retirement to look like and how much that lifestyle will realistically cost.

In some cases, you may not even need a million dollars, especially if you have other assets to pull from. For others, having a million dollars in a 401(k) won’t be enough to last. Be sure to set your retirement savings goals accordingly to properly fund the future you’re eyeing.

3. Contribute Regularly

One great thing about a workplace-sponsored 401(k) is that your contributions can be automated. Your employer can automatically deduct contributions from your paycheck, helping you stay on track with your goals.

In some cases, however, your retirement savings may not be automated. For example, retirement savings for small business owners are often not automated. In this case, you may need to set up a SIMPLE 401(k) or a solo 401(k). This will make you responsible for setting up your own contributions and meeting your own savings goals.

Be sure that whatever retirement savings vehicles you choose, you contribute regularly and consistently.

4. Invest the Maximum

The more you save today, the more your retirement savings grow and the better your chances of meeting your goals. Whether you want to be a 401(k) millionaire, are aiming for early retirement or simply want financial independence, saving the maximum you can afford each month will help get you there.

The IRS limits the amount you can save in your 401(k) each year. For 2026, this limit is $24,500, with an extra $8,000 catch-up contribution if you are over 50 ² . If your budget allows, try to max out your contributions to better your chances of savings success.

Furthermore, 401(k) account owners who are between 60 and 63 years old can save even more thanks to super catch-up contributions. Under a provision of the SECURE 2.0 Act that took effect in 2025, 401(k) participants can now contribute an extra $11,250, bringing their maximum possible contribution to $35,750 in 2026 ($24,500 + $11,250).

If maxing out contributions isn’t feasible, save as much as possible. Aim to save 10% to 15% of your income and watch your balance grow.

5. Take Advantage of an Employer Match

An employer match on your retirement contributions is one excellent way to amplify your savings efforts. This is essentially free money, and you should avoid leaving it on the table if at all possible. If your employer is offering to match a portion of what you contribute to your retirement savings, you should ensure that you are depositing at least enough to receive the full match. The maximum is usually a percentage of your salary, often up to 6% ³ .

Funds may be vested, which means that you only get the full match if you stay with your employer for a minimum amount of time. If you quit your job before that vesting period ends, you won’t receive the full match.

6. Maximize Your Investment Potential

Your employer may offer multiple 401(k) investment options. If this is the case, spend some time researching each option, so you have the best chance of maximizing your returns.

Consider your risk tolerance and when you plan to retire. The further you are from retirement, the more risk you can afford and the higher your potential returns. Be sure to weigh each fund option by its expenses.

7. Limit Your Fees

401(k) fees and expenses vary by plan. While these fees may seem small-often a fraction of a percentage point-they can really add up over time.

Your 401(k) provider automatically deducts fees, which can make costs less noticeable. However, every dollar that you spend on retirement plan expenses is a dollar that can’t grow and compound for your future.

Do your best to balance projected returns with plan costs, and consider switching plans if there’s an opportunity to save on fees.

8. New Job? Roll Over Funds

Each employer will offer its own retirement plan options.

When you switch jobs, you may be offered a managed plan with your new employer. This may be better than the plan currently holding your funds.

You have three primary options for your existing 401(k) savings when you change jobs ⁴ .

• Leave it with your old employer.
• Roll it over to your new employer.
• Roll the funds into an IRA.

If you have enough money in that 401(k), usually $7,000 or more, most plans will let you leave it alone. This could be a good decision if you are seeing great returns and are happy with the plan’s expenses.

However, a rollover may be a better idea if you have less than $7,000, aren’t moving to a new job just yet or otherwise aren’t happy with the plan’s management or fees.

The first route to consider is rolling your money into a traditional IRA. This may be the best choice if your new employer doesn’t offer a 401(k), you don’t have another employer lined up or you just want to have more flexibility with your account options. You can open an IRA with almost any brokerage, which will give you a variety of options for your money.

The second option is to roll your savings into your new employer’s 401(k). If they offer better funds or lower fees and expenses, this is probably your best move.

9. Leave the Money Alone

Whether you’re trying to reach 401(k) millionaire status or just want a successful retirement, there’s one important rule to keep in mind over your decades of saving: Don’t touch the money.

No matter what life throws at you, avoid the temptation to pull from retirement accounts. Early withdrawals can not only derail your progress exponentially but will also subject you to penalties and fees. In most cases, it’s not worth the added cost.

Before tapping retirement funds early, explore other options. In many cases, a personal loan or home equity line of credit (HELOC) could meet your needs just as well.

10. Don’t Forget Other Retirement Savings

While a 401(k) is the most popular retirement account option, it’s not the only one. Depending on your savings strategy and goals, you may want to consider spreading your retirement funds across a variety of different savings avenues.

A traditional or Roth IRA can be another great option for retirement savings, especially if you’re already maxing out your 401(k) contributions. You may also choose to focus on a personal investment portfolio. There, you can invest in funds that your employer doesn’t offer or even individual company stocks.

You can also utilize real estate investments, such as rental property or REITs, to bolster your retirement cash flow. They won’t include the same tax advantages as 401(k)s or IRAs, but can be a great addition to any well-funded retirement strategy.

How Can an Advisor Help You Become a 401(k) Millionaire?

Reaching $1 million in a 401(k) is an achievable goal for many investors. However, it rarely happens by accident. A financial advisor brings a combination of technical strategies and long-term discipline to help you reach that milestone as efficiently as possible.

Contribution Strategy

One of the first things an advisor will address is your contribution strategy.

Many employees contribute just enough to capture their employer match, leaving significant tax-advantaged space on the table. An advisor will help you determine how much more you can contribute annually, potentially pushing toward the IRS annual maximum. They will also show you the long-term compounding impact of even modest increases to your contributions.

For workers 50 and older, an advisor will also ensure you are taking full advantage of catch-up contributions, which allow you to accelerate savings in the critical years before retirement.

Investment Selection

Investment selection inside a 401(k) is another area where an advisor adds meaningful value.

Most plans offer a limited menu of funds. Many investors default to conservative options or spread contributions evenly without a clear strategy. An advisor will analyze your plan’s available funds, identify the lowest-cost options with the strongest risk-adjusted returns, and build an allocation aligned with your timeline and risk tolerance.

Over decades, minimizing expense ratios alone can add tens of thousands of dollars to your final balance.

Alternate Investments

An advisor will also help you think beyond your 401(k) in ways that accelerate your path to seven figures.

Coordinating contributions with a Roth IRA, health savings account or taxable brokerage account ensures you build wealth across multiple vehicles simultaneously. This diversification across account types also gives you more flexibility to reduce taxes in retirement, allowing you to draw from different sources strategically rather than paying ordinary income tax on every dollar withdrawn.

Market-Based Adjustments

Staying the course during market downturns is one of the most underrated aspects of reaching $1 million.

Many investors reduce contributions or shift to overly conservative holdings after a market decline, locking in losses and missing the recovery. An advisor provides the behavioral coaching and long-term perspective needed to keep your strategy intact when markets become volatile. This is often when the most important compounding gains are set in motion.

Rebalancing

As your balance grows, an advisor will periodically rebalance your portfolio to ensure your allocation does not drift too far from your target. A portfolio that started at an appropriate stock and bond mix can become significantly more aggressive over time as equity values rise, exposing you to more risk than you intended.

Regular rebalancing keeps your growth on track without taking on unnecessary volatility.

Bottom Line

Saving for retirement is a decades-long journey, whether you’re aiming for a seven-figure balance or comfortable security. These steps won’t guarantee millionaire status, but they improve your chances of reaching retirement goals and financial security.

Retirement Planning Tips

• Consider working with a financial advisor as you look to maximize the returns from your tax-advantaged accounts. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
• If your investments pay off, you may owe the capital gains tax. Figure out how much you’ll pay when you sell your holdings with our capital gains tax calculator.

Photo credit: ©iStock.com/TakakoWatanabe, ©iStock.com/kali9, ©iStock.com/Yuri_Arcurs